Waiting for change: New Orleans restaurant workers, tips and new ways to pay

More than 10,000 people in New Orleans rely on tips to make a living. Is it time to change the way servers are compensated?

Every morning Catherine "Cat" Bordlee gets up at 3:30 a.m. After showering and getting dressed, feeding her eight cats and kissing her husband goodbye, she leaves her Kenner home. Shortly after 5 a.m., Bordlee arrives at Betsy's Pancake House on Canal Street, the Mid-City diner where she's worked as a server for 2 1/2 years. For the next 10 hours, Bordlee hustles butter-topped pancake stacks, plates piled high with bacon and eggs and fluffy biscuits hidden under blankets of gravy. Some days the restaurant gets so busy she barely has a chance to take a break or sit down.

But Bordlee, 44, loves what she does. At times a hostess, sometimes a bartender and mostly as a server, it's the way she has made a living for the better part of three decades. It's how she was able to become emancipated at age 16, following years of abuse from a family member, she says. It's how she was finally able to buy her own house.

"What can I say? I like people — I'm a social butterfly," Bordlee says. She even maintains a sunny disposition when speaking about customers who stiff her on tips and men who leave her feeling uneasy. "I treat everybody the same — with kindness," she says. "And I just think, that in some way, the next person is going to get you back."

Bordlee is paid $2.13 an hour — the sub-minimum wage restaurants are allowed to pay tipped service workers in several states, including Louisiana. Like most other servers, bartenders and food runners, Bordlee depends on tips — which she says amount to roughly $600 to $800 a week, or $10 to $13 an hour for a 60-hour week — to make a living. It's a good salary for her most days, she says, though it can get tough in summer and slower seasons.

And that $2.13 an hour? After a week of working 10-hour shifts six days a week, taxes eat up most of it. On a recent afternoon, Bordlee sat down and displayed her paycheck for the pay period that week: it was $17.30.

Photo by Cheryl Gerber

At his coffee shop El Libre, Blake Lindberg has set up a wage and tipping program he believes has all his employees making more than $15 an hour.

In the New Orleans metro area, more than 64,000 people are employed in food preparation and serving-related occupations, according to the Bureau of Labor Statistics. Of those, about 15,000 work as tipped servers in restaurants. The job has a clear allure, not only when the tips are good: a flexible schedule and typically more days off than in some other professions.

Every restaurant has a different system for paying their employees, but in Louisiana, tipped workers can be paid the federal tipped wage of $2.13 an hour, meaning that service workers depend on the graciousness of their customers to make their living. Bad tippers, slow nights and off seasons, especially in New Orleans' tourist-dependent economy, can make for a shaky source of income. By law, employers are required to compensate their workers if their earnings fall below the federal minimum wage.

"I don't think it's fair or responsible," says Jack Murphy, who owns the Marigny restaurant Paladar 511 with his business partners Ed and Susan Dunn. "What if it's slow that night? What if they don't get any tables and they get cut around 8 p.m.? Well, they just ruined their day and they only made $8 for the time they were there."

The Faubourg Marigny spot is one of a small number of restaurants in the city that pays tipped employees a higher hourly wage, including Beachbum Berry's Latitude 29, El Libre, Feelings Cafe and a few others. It's still a small movement, locally, but it's one that's gained a lot of traction nationwide, from chefs and restaurant owners, lawmakers and advocacy groups.

Last year, New York chef and restaurateur Danny Meyer eliminated tipping at all of his restaurants, while raising menu prices to balance an hourly wage increase for both his front of the house and back of the house staff. Several states, including California, Washington and Oregon, have passed laws requiring employers to pay tipped workers the state's minimum wage.

Photo by Cheryl Gerber

Server Cat Bordlee says she loves her job at Betsy’s Pancake House and makes a good living, though her actual $2.13 per hour wage covers mostly just taxes, with tips representing most of her earnings.

Saru Jayaraman is co-director of the Restaurant Opportunities Center United (ROC), which advocates for better wages and working conditions in the industry. In her books Behind the Kitchen Door and Forked: A New Standard for American Dining, she points to the lack of health care benefits, low wages and minimal job security facing most restaurant workers — and makes a case for raising wages and changing the existing standard to ensure fair labor practices across the industry.

ROC surveyed New Orleans restaurants in a 2010 study, which found that the median hourly wage for all restaurant workers — including food preparation and serving-related occupations — was $7.76 an hour. That number since has risen to $9.87 an hour, but that's still below what constitutes the livable wage of $10.79 in New Orleans for a single adult without children, according to the Massachusetts Institute of Technology living wage calculator.

The 2010 report also found that roughly 84 percent of restaurant workers didn't receive health care coverage through their employers, and 38 percent worked overtime without being paid properly.

Cedric Watts, director of the New Orleans ROC chapter, points to the rising cost of living in the city as extremely burdensome on workers who depend on tips for income. With housing prices on the upswing and the average rent for a two-bedroom apartment averaging $1,500 per month, Watts says most of the restaurant employees with whom he works are forced to commute from New Orleans East or the West Bank, while the majority work in or around the French Quarter.

"Restaurant workers can't afford the food they serve and they can't afford to live in the same neighborhood as the restaurants where they work," Watts said. "The minimum wage has increased and the sub-minimum (for tipped workers) hasn't changed at all ... and there's no respect [for] cost-of-living inflation."

Photo by Cheryl Gerber

Chef Nick Newman at Paladar 511 says wages haven’t changed much for cooks over the past decade, though the cost of living has increased significantly.

Although servers at high-end, fine-dining restaurants sometimes make up to $1,000 a week, most are required to share a certain percentage of their total with food runners, hostesses, sometimes the kitchen and, in a few cases, others. The percentage varies from restaurant to restaurant, and one of the problems with paying servers $2.13 across the board — from low-end to fine dining — is that it's not a one-size-fits-all model — and on the lower end of the spectrum often doesn't constitute a livable wage, Watts said.

According to Jayaraman, there's also a $4-per-hour wage gap between white workers and workers of color in the restaurant business. "Just pick any restaurant and look who's in the front of the house: You'll see a lot of white males and females," she said. "Then look in the back and you're going to see all African-American and His-
panic. Often, they make less ...
and we have people of color who have said they get tipped less. It's all unfortunate."

Divonite Almestica has been working in restaurants for the past 20 years. He's also a member of Stand with Dignity, a local organization that works to promote racial justice and a living wage for all workers.

At his current job (an Uptown bistro which he asked to keep anonymous), he gets treated well and paid a wage higher than the minimum, plus tips. He guesses he makes about $600 to $700 a week and says he's happy. Prior to this job, though, Almestica worked a series of gigs in the French Quarter and on Bourbon Street, most of which he said were low-paid jobs where he often was discriminated against because he was black. Even though Almestica is a skilled bartender, he said he often was overlooked and given the job of server or, in some cases, back waiter positions, while his white counterparts got hired behind the bar.

"I've been lied to while being interviewed for jobs, being told I was going to be hired for one thing but then forced to work another," Almestica said. "If you're black, you're going to have a hard time finding a job as a bartender, and sometimes even as a server."

Photo by Cheryl Gerber

Divonite Almestica has worked in restaurants across the city for about 20 years but says he faces discrimination in getting bartender and some serving jobs because he is black.

More cities are facing proposed legislation to raise the minimum wage to $15 an hour, and restaurateurs in New York, Los Angeles, Seattle and San Francisco are experimenting with all-inclusive, no-tipping policies.

It's an appealing idea to some who wish to see better labor practices and a more equal distribution of wealth in the industry, but eliminating tipping comes with a corresponding price hike for diners, and doesn't always work, says Zach Adams, an industry veteran who has worked at restaurants across the country, including several with no-tipping policies in San Francisco.

"For every success story, there's one that's failed," Adams says. "The only place I've seen it work is really high-end tasting menu (restaurants)."

The discrepancies in restaurant pay prompted Adams, a server at Josephine Estelle, to build the iPhone application pooledhouse, which is set to launch this fall. He says the app will enable servers to navigate the pay and working conditions at restaurants in the city. Users will be able to log their earnings so that service staff considering a job at any restaurant will have an idea of what the pay is like before they sign on.

"Employers are always coy about giving away how much their staff is making," Adams says. With the app, "You'll be able to have an idea whether you're going to be making more or less money than you currently are ... and before you take a job you'll have access to information about what that job will be like."

The U.S. Department of Labor defines a tipped employee as someone “engaged in an occupation in which he or she customarily and regularly receives more than $30 a month in tips.”

Wendy Waren, vice president of communications at the Louisiana Restaurant Association (LRA), declined to discuss the legislation, writing in an email, "We have no comment about the positions we take on advocacy with the media. The LRA's mission is to serve the interests of the industry, which also includes the investors and owners of these many job-creating businesses."

Those arguing against raising the minimum wage for tipped workers point to tight restaurant margins, and say raising the minimum wage would hurt restaurants — and in some cases, bankrupt them.

Phils' Grill owner Phil DeGruy says raising the minimum wage for tipped employees could have catastrophic effects on small business owners like him. He even crunched the numbers to see how raising the minimum wage for tipped workers to $7.25 an hour would affect his business.

"It would crush me," DeGruy says. "A fine dining restaurant could probably afford to pay higher server wages because of the perceived value ... but the margins are too thin to turn the business model on its head. It's such a sensitive topic — of course you don't want to tell people they don't deserve more money ... but the design of the industry is just not made to absorb it."

Photo by Cheryl Gerber

Cedric Watts, director of the New Orleans Restaurant Opportunities Center United, says most restaurant workers can’t afford to eat where they work or live in the same neighborhood where they are employed.

In New Orleans, some restaurants are experimenting with different policies in an attempt to provide employees with better wages.

When Blake Lindberg was opening the French Quarter Cuban coffee and sandwich shop El Libre, he started all of his employees at $10 an hour, with hopes he eventually could pay everyone at least $15 an hour, plus tips. Lindberg now says that wasn't feasible. "Because we're such a small operation, there's no way we could pay everyone $15 an hour; we'd go bankrupt," Lindberg said.

Instead, he found another solution he believes has served his employees well. Currently full-time El Libre employees make $12.50 an hour plus pooled tips, while part-time workers make $10.50 an hour plus tips. At $12.50 an hour with tips, Lindberg estimates each worker makes around $17.50 to $19.50 an hour, and those making less are still coming in above the $15 an hour mark. All workers at the tiny shop share responsibilities including making sandwiches, slinging cocktails, ringing up customers and general maintenance.

"We haven't had any turnover," Lindberg said, citing the staff's camaderie and cooperation. "You can feel it; it's fun and people actually want to work here."

"On any given night, the kitchen staff runs 99 percent of the food," Murphy said. "We expect people to do more than what's usually expected, though. There's no idle time. The kitchen staff polishes silverware, refills water, buses tables, resets tables — and the waitstaff also helps out with other tasks. So we have less people working; a more traditional restaurant would have maybe twice or three times as many people working at any given time."

Because of this, Murphy said, he can employ fewer workers — the restaurant currently has 18 — while paying them more. He estimates his staff can make up to $200 in tips on a busy night. "On a very slow night, it might be around $90, but usually it's somewhere in the middle, around $140 to $150." Murphy estimates his employees each make $22 to $30 an hour after taxes.

It's an unprecedented jump in pay for line cooks. Nick Newman, a chef, said he made about $13 an hour at his previous job.

"The amount that cooks have gotten paid hasn't really changed in the past 10 years," Newman said. "When I started cooking 12 years ago you could make $12 an hour, and now maybe you can make it up to $14 an hour, but it's still kind of in the same range, even though living in New Orleans has changed so much.

"Ten years ago you could easily make a living as a cook. Now, not so much."

Murphy said his idea initially got pushback from some servers who feared they would make less than under a traditional system. "But we're consistently busy and we're efficient, so they really clear as much as they would at a normal restaurant," he said. "It's just done very differently."

But getting rid of tipping completely would be hard, he added.

"Tipping in America is institutionalized. It's very established, and it's hard to make changes," Murphy said. "If you don't do it right, you're basically taking money that usually goes to a particular person and redistributing it to other people ... but I don't think it's impossible."